Fitch Raises Mongolia's Long Term Currency Ratings Outlook

(RTTNews) - Fitch Ratings on Sunday raised the outlook on Mongolia's long term foreign and local currency ratings to stable from negative and affirmed the corresponding Issuer Default Ratings at 'B'. Fitch also confirmed the country ceiling and the short term foreign currency IDR at 'B'.

Fitch said the revision was based on the stablization of Mongolia's soverign credit fundamentals particularly since the IMF programme was approved in April 2008 and the country signed various external borrowing agreements with the World Bank, Asia Development Bank and the Japanese government in the first half of this year.

The firm said Mongolia's external fiscal position has been stabilizing since the IMF programme, with the foreign exchange reserves recovering from its lows in March. Moreover, its external liquidity position is the strongest among the ' B' peer group and it has no short-term external debt, Fitch noted. The government also showed fiscal prudence.
Inflation within the country decelerated to single digits, and the country's exchange rate against the U.S dollar was stabilizing as the central bank committed to a flxible exchange rate under the IMF regime, Fitch pointed out.

Meanwhile, the firm said the signing of Oyu Tolgoi, one of the world's largest copper-gold mines, investment agreement as a very positive development for Mongolia. The agency believes this will boost the Mongolian government's profile with international investors interested in further mining development, and would benefit the country's long-term economic development. Mongolia's economy and external and public finances are highly dependent on volatile commodity-price cycles, Fitch added.

by RTT Staff Writer

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